June 30, 2017 / 12:03 PM / 24 days ago

Kenya sells additional $9.6 million worth of bonds via mobile phone

2 Min Read

A delegate uses her cell phone to buy a M-Akiba bond during the launch of the first mobile-phone-based government bond at the Treasury building in Nairobi, Kenya March 23, 2017.Thomas Mukoya

NAIROBI (Reuters) - Kenya started selling another 1 billion shillings ($9.64 million) worth of bonds via mobile phone on Friday after an initial 150 million shillings issued sold out in days.

The East African nation started selling a three-year infrastructure bond, called M-Akiba, on March 23, becoming the first country in the world to issue a mobile phone-based bond without any need for a bank account.

"Today we again celebrate our leadership in mobile money innovation," Kenya's finance minister Henry Rotich said during an event to launch the bond at the Nairobi Securities Exchange.

The initial 150 million shillings raised was the first tranche of the bond.

Friday's offering left another 3.85 billion shillings to be sold at a later date. The bond sale is a further advance in financial technology for the country which pioneered mobile money with M-Pesa in 2007.

Kenya has borrowed intensively in the past four years to fund an ambitious development programme, including new roads and a coast-capital railway, and the government wants to raise more cash.

A customer uses her cell-phone to access the Sidian Bank mobile-app inside the banking hall at the Sidian Bank headquarters on the outskirts of Kenya's capital Nairobi, June 29, 2016. Picture taken June 29, 2016.Thomas Mukoya

However, few ordinary Kenyans bought government bonds, scared off by the minimum investment of 50,000 shillings and the need for a commercial bank account.

M-Akiba allows a single investor to put in a minimum of 3,000 shillings and a maximum 1 million shillings, earning tax-free interest of 10 percent. They will be able to trade them on the secondary market.

The bond was initially available on telecom companies' money transfer services, but has since also been opened to a similar operation run by commercial banks, known as Pesalink.

The bond will be on sale from June 30-July 21 and will be tradable on the stock exchange on July 25.

Rotich said that in future all infrastructure bonds offered by the government will have a portion of them dedicated for sale via mobile phone.

($1 = 103.7000 Kenyan shillings)

Editing by Ed Osmond

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